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May 3, 2011

Tom Bradley, TD Ameritrade: The Extended 2011 IA 25 Profile

Bradley discusses BD/RIA harmonization, the separation of sales and service, and his wish for the RIA examination process

Tom Bradley deserves to be on the IA 25 by dint of his longevity running a major custodian while his key competitors have seen multiple guys and gals at the top; by his refreshing willingness to speak out on multiple areas of interest to advisors; by his long, consistent advocacy of a fiduciary standard for advice givers; and by the way he’s grown TD Ameritrade Institutional to become a major player in the custodial space, especially when it comes to its technology platform and its practice management offerings. Advisors know where Tom Bradley stands, and that he stands up for them.

The last time Bradley was on the list, 2009, we quoted him as saying he’d like regulators to “understand the difference between someone who sells a product to individuals and institutions who know they’re talking to a salesperson, and those who operate under a fiduciary standard to that individual and institution.” When asked in an April interview if he thought regulators now get that difference, Bradley said “the regulators and lawmakers are starting to understand” a development pushed by the move to "harmonize" RIA and BD regulations. “Now they’re realizing this is harder than they thought. How can you turn a salesperson into a fiduciary?” Ever the advocate, but also a realist, Bradley says that while much has changed in his 25 years in the business, one thing hasn’t: “The RIA community has always been focused on putting the clients first.” But he also notes that “there’s a reason for two models; we should preserve choice.”

How to preserve choice, then, while putting clients first? “Separate sales and advice services from each other.” Will it happen? Will the wirehouses split the sales and advice components of their offerings? “If our lawmakers say that they have to do that, they can adjust their models. You’re seeing signs of that already—many have RIA umbrellas.”

TD Ameritrade Institutional has “gotten good at looking ahead," says Bradley, when it comes to serving its RIAs, citing moves like its acquisition of iRebal and thinkorswim, and its still-young platform of “100 free ETFs, picked by a third party,” referring to its 2010 rollout of 100 commission-free ETFs chosen by Morningstar. “Not one of those 100 ETFs has a name that starts with ‘TD Ameritrade,’ he proudly points out. At press time, Bradley was also proud of a new iPad app for working with TDA’s Veo platform. The use of iPads by advisors is not only on the upswing, but “will change the way they interface with clients.” But beyond the specific application, Bradley is excited by TDA’s Apple computer-like approach to apps: Rather than wait for TD to build apps, third-party providers—and advisors themselves, if they wish—can create advisor-specific applications using the API interface for building applications.

On the advocacy front, Bradley would like to see a more consistent approach on how the SEC conducts examinations of RIAs, and believes there should be more transparency around “the qualifications and training of the examiners.” He’d prefer to see the examination process “run like a business,” and in fact would like to see the SEC itself become more efficient. “I’m not sure we should just be throwing dollars” at the SEC to improve, calling again for more transparency at the Commission.

Don't see someone on this year's IA 25 that you think belongs there? Submit their name and your justification for why they should be considered among the most influential people in and around the advisor universe in the Comments field below. We promise to consider reader nominations, but please, no ad hominem attacks on those who were named in this or past years.--Ed.